20120626 1017 Malaysia Corporate Related News.

KPJ sets aside RM2bn capex over 5 years
KPJ Healthcare Bhd is allocating RM2bn in capital expenditure (capex) over the next five years to further strengthen its position in the country’s private healthcare sector. Chairman Kamaruzzaman Abu Kassim said the capex included RM867m to be spent over the next three to four years to open new hospitals nationwide. He said RM100m to RM150m would also be allocated yearly to upgrade existing outlets, including building new wings at its existing hospitals and buying new medical equipment. (StarBiz)

FGV’s Q1 net profit hits RM223.2m
Felda Global Ventures Holdings Bhd (FGV) posted a net profit (before minority interest) of RM223.2m in the first quarter ended 31 Mar 2012. This was lower than the RM350.2m recorded in the same quarter last year. The lower profit was partially due to rising costs and a decrease in revenue from downstream operations as a result of a tolling agreement related to its joint venture in Canada. (BT)

Retailers group raises forecast
The Malaysian Retailer Chains Association (MRCA) has revised upwards its 2012 revenue growth projection of its members to between 5% and 6% as it foresees more contributions coming from abroad. MRCA, which has 206 members with over 10,000 retail outlets, late last year projected average growth of 4%-5% for its members. The revised projection is more in line with the 6% growth forecast by Malaysia Retail Association (MRA). However, MRCA numbers are different from those of MRA as the former only takes into account sales growth registered overseas by its locally-incorporated members. (BT)

Pos Malaysia ventures into Islamic pawnbroking
Pos Malaysia Bhd continues its diversification by venturing into Ar-Rahnu, the Islamic pawnbroking business. The postal group has entered into a 80:20 joint venture with Bank Muamalat Malaysia Bhd (BMMB) to start Ar-Rahnu in selected Pos branches. The partnership will leverage on Pos Malaysia’s extensive network of more than 700 outlets nationwide to minimize start-up and operating costs and BMMB’s experience in pawnbroking. (Financial Daily)

Handal Resources lands RM150m job
Handal Resources Bhd’s unit Handal Offshore Services SB (HOSSB) has landed a RM150m contract from ExxonMobil Exploration and Production Malaysia Inc. The company told Bursa Malaysia that the award was for the provision of integrated crane services for a period of five years commencing June 2012, with the option for a one-year extension. (Financial Daily)

Alam Maritim sees higher revenue after combining operations
Alam Maritim Resources expects a higher revenue this year after the integration of its offshore support vessel (OSV) and offshore installation and construction (OIC) operations. Chief executive officer Azmi Ahmad said the company’s competitive edge was its ability to provide integrated services so that clients were able to minimise their logistics cost. “With the development of our OIC unit, we are able to increase the utilisation rate of our assets. We expect our vessel utilisation rate to be 89% this year,” he said after Alam Maritim AGM. Chairman Datuk Ahmad Sufian said the company’s OSV sector had an orderbook of RM700m, which would last for two to three years, and a long-term charter contract for two vessels lasting 14 years. (StarBizWeek)

Tajudin, MAS withdraw suits
Malaysia Airlines and its two subsidiaries and former Malaysia Airlines (MAS) executive chairman Tan Sri Tajudin Ramli have withdrawn their suits against each other for breach of fiduciary duty. High Court judge Justice Rosilah Yop granted the application and struck out the plaintiff's claim against all defendants and all counter-claims against 17 defendants without cost and without liberty to re-file. Malaysia Airlines and its two subsidiaries - MAS Golden Holidays SB and MAS Hotels & Boutiques SB - filed the main suit in 2006 against Tajudin and four others. (StarBizWeek)

Massive dredging at Samalaju Port
The new Samalaju Port project in Bintulu will involve massive dredging and reclamation works worth RM193.9m as part of plans to expand port facilities. According to the project's approved preliminary environmental impact assessment (PEIA) report, an estimated 18.98ha would be reclaimed for the construction of port platform areas as well as other structures such as wave breaker and berths. Bintulu Port Holdings (BPHB), which was tasked by the Sarawak government to undertake the project, awarded the construction of interim port facilities contract to Trans Resources Corp SB (TRC) recently. The interim facilities would comprise a ro-ro ramp and two barge berths of 160m in length each with a depth of 7m. The contract would be divided into two sections A and B for completion in nine and 12 months respectively. (StarBiz)

MBSB to grow Cheeky Savings Club accounts
Malaysia Building Society (MBSB) intends to grow its Cheeky Savings Club to 50,000 accounts by the year-end from 16,000 currently. As part of its strategy to accelerate growth, the company will launch “Over The Top” kids reality show that will start airing on 8 Sept for eight consecutive weeks. “We hope that these Cheeky Savings Club members will eventually come back to us for other services, be it housing loans, hire purchase or bancassurance,” said senior vice-president for retail business division Azman Aziz. Currently, some 95% of MBSB's loans are derived from Angkatan Koperasi Kebangsaan Malaysia's (Angkasa) scheme. (StarBiz)

Country Heights mulls Chinese healthcare hub
Country Heights Holdings (CHHB) is mulling setting up a hub in Kuala Lumpur or Sarawak to house a hospital for traditional Chinese medicine, a university and college. CHHB founder Tan Sri Lee Kim Yew said Malaysia needs a good 300-bed hospital so the public can seek treatment using Chinese medicines and methods from acupuncture to cupping. In its efforts to expand and diversify its health business, CHHB has set up a traditional Chinese and healthcare centre at Golden Horses Health Sanctuary, located at the Mines Wellness City (MWC). MWC, formerly, Mines Resort City, is an integrated health and wellness resort city in Sri Kembangan, here. (BT)

EPF sells plantation stocks
The Employees Provident Fund (EPF) has been selling down its shares in several plantation companies including Kuala Lumpur Kepong, IOI Corp, TH Plantations, Genting Plantations, Tradewinds Plantation and IJM Plantations since 31 May, ahead of the listing of Felda Global Ventures Holdings (FGV). The value of these transactions amounted to some RM230m. A fund manager said it is possible the fund is selling down its holdings of plantation stocks whose earnings are tied to crude palm oil price in a move to rebalance its portfolio ahead of FGV's listing on Thursday. (Financial Daily)

Dialog signs MoU with Halliburton
Dialog Group subsidiary Dialog D&P SB has entered into a memorandum of understanding (MoU) with Halliburton Energy Services (M) SB (HESSB) to jointly cooperate to pursue projects and opportunities in the redevelopment of mature oil fields in Malaysia. Dialog told Bursa Malaysia last Friday that the strategic alliance with HESSB is in line with Dialog's strategy to continue to develop its upstream capabilities in the oil and gas activities. (Malaysia Reserve)

Prestariang gets nod to set up higher education institution
Prestariang has received an invitation from the Ministry of Higher Education to set up a private higher education institution in the country, the information communication and technology (ICT) training services provider said in a filing to Bursa Malaysia last Friday. The company said its subsidiary, Prestariang Education SB, received a letter of invitation to set up the institution, to be known as University of Computing in Malaysia. Prestariang currently offers ICT certification and provides training programmes in software development. (Malaysia Reserve)

Government to drive post-harvest technologies
The government will generate more initiatives and provide relevant incentives for the development of post-harvest technologies in a move to boost production in the agriculture sector, said Deputy Prime Minister Tan Sri Muhyiddin Yassin. He said special allocations and research and development (R&D) grants would be provided to support these initiatives. He added that through better infrastructure, crop production management techniques and post-harvest technologies, Malaysia had set the target of raising production of agriculture commodities by 40% by 2020. (Financial Daily)


Top Glove Corporation Berhad’s wholly-owned sub-subsidiary, Best Advance Resources Limited had on 22 June 2012 entered into a conditional Share Sale and Purchase Agreement to acquire 95% of the total issued and paid-up shares of PT Agro Pratama Sejahtera (PT Agro). PT Agro is the holder and owner of business license issued by the Ministry of Forestry for rubber forest plantation business over land area measuring almost 30,773 hectares in Kabupaten Bangka and Kabupaten Belitung, Province of Kepulauan Bangka Belitung. (BMSB)

The supplemental collaboration agreement between Malaysia Airlines (MAS) and AirAsia X was signed to provide an opportunity to the national carrier to operate flights at a lower cost, Prime Minister Datuk Seri Najib Tun Razak told the Dewan Rakyat. He said the agreement and two other memoranda of understanding inked after the MAS-AirAsia ahare-swap deal was shelved was for procurement, aircraft repair and maintenance services. "MAS had the opportunity to enjoy better terms and conditions through sharing of equipment and services besides sharing and selling reserve capacity to other airlines," said Najib, who is also Finance minister. (Bernama)

AirAsia X has made the right decision to end its Kuala Lumpur-Tianjin route and fly direct to Beijing. CEO Azran Osman Rani said more than 80% of the seats for the airline’s new four-times weekly KL-Beijing flight for the next three months had been sold since the launch of the route last Friday. We are going to extend the KL-Beijing route to daily service starting from Aug 6. (The Star)

Muhibbah Engineering (M) Bhd (MEB) entered into a conditional sale and purchase agreement with Favelle Favco Bhd (FFB) for a proposed disposal of a crane fabrication yard in New South Wales, Australia, for RM48m. The sale will be via the allotment and issuance of 31.7m new ordinary shares of 50 sen each in FFB at an issue price of RM1.52 per FFB share. The yard comprises a large industrial factory used by FFB for crane fabricating/manufacturing on around 4.684ha industrial land parcel. (BT)

A senior Umno backbencher accused the Najib administration today of favouring Tan Sri Syed Mokhtar al-Bukhary in government procurement, saying the logistics tycoon is “like a king.” Kinabatangan MP Datuk Bung Mokhtar Radin told Parliament this when criticising the selection of Syed Mokhtar’s Seaport Terminal to take the finance ministry-owned Penang Port Sdn Bhd (PPSB) private, saying it was “unsuitable in current conditions.” “Syed Mokhtar is like a king with so many banks backing him,” the Barisan Nasional (BN) backbenchers deputy chief said , referring to the former’s empire which has a reported total debt of RM34.3bn, or about 10% of all local corporate bonds. The surging debt of companies under Malaysia’s richest Bumiputera has raised fears of a repeat of the financial system’s collapse in 1998 that had then been spurred by the failure of Renong Bhd to fulfill its liabilities. (Malaysian Insider)

Petronas Dagangan plans to invest an additional RM200m in its recently acquired six downstream businesses in the Philippines, Vietnam, Thailand and Malaysia over two to three years. Chairman Datuk Wan Zulkiflee Wan Ariffin said the new businesses are expected to contribute significantly to its earnings in four to five years. He added that the companies that Petronas Dagangan has acquired are existing companies with businesses within its core competencies, namely LPG, lubricants and aviation. On local market share, Wan Zulkiflee said the company holds 31% in the retail segment, 60% in the commercial segment, 55% in the LPG segment and 24% in the lubricant segment. (Bernama)

Acquisitions of both greenfields and brownfields for oil palm and rubber plantations are expected to hasten up given continued interest to invest in plantation and agriculture crops in the next decade, said Malaysian Palm Oil Council CEO Tan Sri Dr Yusof Basiron. He said this interest will not only be confined to experienced plantation companies but also corporations which have never been involved with agriculture in the hope of reaping similar good rewards from the venture. (Starbiz)

Malaysia’s palm oil exports rose 4.4% in the first 25 days of June from the same period in May, independent market surveyor Intertek said. A total of 1,196,702 metric tons of the commodity were tracked, versus 1,146,406 tons in the same period last month, Intertek said. (Bloomberg)

Plantation industry should initiate their own action plans to meet future challenges while the government continue to assist them by identifying measures to ensure the industry's long term resilience, said Primary Industries and Commodities Minister Tan Sri Bernard Dompok. He said the main challenge in the industry would be a cohesive effort to explore measures to increase productivity. (Starbiz)

Indonesia, the world's top palm oil producer, will cut its export tax for crude palm oil to 15% in July from 19.5% or June, a trade ministry official said on Monday. The government will also cut its export tax for RBD palm olein to 7% in July, from 10% this month. (Reuters)

Malaysia's first neutral Internet Exchange, MyIX, has played a role to improve the local broadband household penetration rate to 63% as of early this year, says its chairman Chiew Kok Hin. MyIX, a non-profit organisation, was set up in 2006 to keep Malaysian Internet traffic local, with the cooperation of local ISPs to promote and allow direct connectivity among the local ISP fraternity. Its 3 co-founders are AIMS Group, Jaring Communications and Telekom Malaysia. "Local ISPs have an alternative to route their Internet traffic in an operationally efficient and cost-effective way via our faster in-country bandwidth connectivity set up. By doing that, they are saving US$400,000 (RM1.3m) a month," he said at a media briefing. MyIX has 49 members, comprising local ISPs and content providers. It has invested RM10m in the last 5 years to develop the exchange. There are 8 Internet exchange nodes currently, commissioned by the MCMC, allowing direct traffic among ISPs in Malaysia. 3 nodes are located in the Klang Valley at Menara Aik Hua, Technology Park of Malaysia and Cyberjaya, and one each in Bayan Baru, Johor Baru, Kuantan, Kuching and Kota Kinabalu. (BT)

Local real estate investment trust (REIT) market capitalisation is expected to grow by more than 30% to RM20bn this year from RM15bn in 2011, mainly from the upcoming listing of IGB Corp Bhd's REIT, said Sunway REIT Management Sdn Bhd CEO Datuk Jeffrey Ng. There are now 15 REITs in the country, offering an average yield or return of between 6% and 7%. Ng said the outlook for the REIT industry remained robust, driven by domestic economic growth as well as quality REIT assets, management with good track records and the location of the assets, and is starting to attract international institutional investors. "If there is continued facilitation by the government to encourage more investors to come in and at the same time, REIT players continue to display higher levels of corporate governance and putting good assets to build up their portfolios, there is no reason for Malaysia not to attract (more) international investors," he said. Ng also advised people to look at the quality, size and management of the assets before investing. "We are still in the infancy stage. It's only in the last two to three years that big names have started to come in. All the big players are starting to put their assets into REITs. The market cap had grown from over RM350m to RM10bn in 2010," he said. Meanwhile, Chor said Malaysia is still far behind in terms of REIT market cap compared with other Asian countries such as Singapore, Hong Kong and Taiwan. He said new developments such as Greater Kuala Lumpur, Iskandar Malaysia in Johor, and Sarawak Corridor of Renewable Energy will provide the engine of growth for the overall property sector in the country. In order to have steady and continued growth for such huge property development, he said investment can be sourced and secured through REITs. Chor also urged the private sector to play their role in creating and offering successful REITs. On its part, the government is giving a concessionary tax rate of 10% on dividends for non-corporate institutional and individual investors in REITs until Dec 31, 2016. (Sun)

Padiberas Nasional Bhd (Bernas) has allocated RM250m for acquisitions and capital expenditure (capex) as part of its expansion plan this year, its managing director Datuk Bakry Hamzah said. He said on Monday that RM100m would be for acquiring new rice mills. "We are planning to buy between two and three mills for our long-term investment but we are not in a rush to do so," he said, adding that such acquisitions were not Bernas' core business strategy as it already owned 33 mills and this was adequate for the rice distributor. The group controls about 25% of the local paddy market and 58% of the local rice market. (Starbiz)

An integrated steel mill, to be built in Lumut, is expected to reduce the coun-try's steel import dependence by some RM6bn once it is fully operational by June 2015. Maegma Steel HRC Sdn Bhd director Tunku Shaharuddin Tunku Mahmud said the company would be investing RM4.5bn in the first phase of the project to build the plant, which would have the capacity to produce some 1.5m tonnes of thin metal sheets, or "Hot Roll Coils" (HRC), a year. "In the first phase itself, our plant capacity will be able to help the country reduce dependence on HRC imports, which is currently estimated at one million tonnes per year."Once the plant is fully operational, it will have a capacity of producing some three million tonnes per year, valued at some RM6bn. "We will also be helping the country to save significantly in terms of foreign exchange," he added. (BT)

A proposal to introduce crop insurance coverage for farmers has been submitted to the Cabinet for approval. The idea was to provide insurance coverage for farmers whose crops were destroyed by natural disasters such as floods or dry spells, said Agriculture and Agro-based Industries Minister Datuk Seri Noh Omar. We originally proposed for insurance coverage to be made available to padi farmers but the cabinet is currently studying the proposal to see which other agricultural sectors should be given insurance coverage. (Star)

Petronas Nasional Berhad may set up a regassification plant (RGT) in Perak if the demand for natural gas is viably high. The company anticipates that with the price increase of gas there may be reduced demand in the power sector which means we may not need to build the Perak plant so soon as it can come later when the demand increases. For now, Petronas will bring in gas from two liquefied natural gas RGTs one from Malacca and the other one from the Southern part of Johor. The Johor plant is expected to be ready by the middle of the decade. (Malaysian Reserve)

Minetech Resources has accepted a letter of award from MMC Gamuda KVMRT (T) Sdn Bhd to undertake construction works worth RM29.5m. In filing to Bursa Malaysia, Minetech said it would carry out the construction of underground excavation work and rock strengthening works including all temporary and ancillary works for the Cochrane station under the Sungai Buloh-Kajang MRT line. The sub-contract works, to be completed by May 31, 2013, is expected to contribute positively to future group earnings, it added. (Bernama)

Dijaya Corp Bhd’s 80%-owned subsidiary, Aliran Peluang Sdn Bhd, has entered into a sale and purchase agreement with Chua Joo Cheng @ Chua Su Yin to acquire 23 hectares in Johor Baru, Johor, for RM105m or at RM43.80psf. Dijaya said the proposed acquisition ties in with its strategy to acquire sizeable land banks with good development potential, especially in the economic zone of Iskandar Malaysia. (BT)